When House and Senate Democrats announced a new tax package proposal on April 15, it included HB 2049. As introduced, HB 2049 would have increased the property tax growth limit for the state and local governments and increased the maximum per pupil limits for school district enrichment levies. At the time, I showed that the bill’s impacts to state revenues would have made it one of the largest state tax increases.

However, HB 2049—like many of the other tax proposals—went through substantial revisions before the end of the legislative session. As enacted, ESHB 2049 does not increase the state or local property tax growth limit, so it is not one of the largest state tax increases. (The Legislature increased a lot of taxes this year, but it did not adopt any bills that change state or local property tax growth limits.)

ESHB 2049 does increase the maximum per pupil limits for school district enrichment levies. This means that school districts are allowed to ask voters to approve higher enrichment levies. Districts may choose not to ask for higher levies, and voters could reject any attempts to do so.

Before ESHB 2049, school districts were allowed to levy the lesser of $2.50 per $1,000 of assessed value of property or the maximum per-pupil limit. The statutory maximum per-pupil limit is $2,500 for districts with fewer than 40,000 students or $3,000 for districts with 40,000 or more students; these maximum per-pupil limits are adjusted for inflation (using the Seattle area consumer price index). For calendar year 2026, the maximum limits are $3,851 and $4,522 respectively.

ESHB 2049 increases the maximum per-pupil limit by adding an inflation enhancement of $500 in CY 2026 and 3.33 percentage points to the inflation adjustment each year from CY 2027 to 2030. Districts with more than 40,000 students will only get the $500 enhancement in CY 2026. Then, beginning in CY 2031, the maximum per-pupil limit will be $5,035 regardless of enrollment. This amount will be adjusted for inflation annually.

The state has not published a final fiscal note for the enacted version of the bill. According to the Office of Superintendent of Public Instruction, the increased levy authority is estimated to increase school district revenues by $146.5 million in 2025–27, $188.3 million in 2027–29, and $123.7 million in 2029–31. This assumes that districts will collect revenues up to their voted authority. Some districts have voter approval for levies that exceed the maximum limits under previous law, so they will be able to automatically collect up to the new state maximum, as long as it is below the voter approved level. (For example, Seattle Public Schools has a $250 million voter-approved levy for 2026, but the maximum they were allowed under state law prior to ESHB 2049 was $225.1 million.)

The ultimate revenue impact of ESHB 2049 is uncertain, given that any increases above current approved levies would need to be advanced by districts and approved by voters. But the bill’s changes to the maximum levy limits represent another erosion of the Legislature’s response to the McCleary decision on school funding. As we explained in our 2020 accounting of the response, the Legislature increased the state property tax and limited the ability of districts to raise local levies. This was an attempt to avoid the cycle Washington has been in: “State school funding drops (due to recession or other priorities), local levies make up the difference, courts rule that the state must pay more, repeat.”

Perhaps acknowledging the possibility that the increased enrichment levy limits could lead to new school funding lawsuits, ESHB 2049 also establishes a work group to consider revisions to the K–12 funding formula.